Embroiled in friction, ridiculed, and under threat, TIM's stock plummets 7%.
Two months after firing Luca Luciani from the presidency of the company in Brazil for fraud, TIM couldn't withstand criticism of weak signal from Minister Paulo Bernardo; online, with Gabriela on the roof, it became a laughingstock; on the Bovespa stock exchange, shares plummeted due to the risk of not being able to acquire new customers.
247 – TIM's phone lines are busy. This is due to criticism from the Minister of Communications, Paulo Bernardo, who accused the company of having a weak signal and therefore risking not being able to attract new customers. It's also due to the still-unprocessed resignation of former Brazilian president Luca Luciani, accused of involvement in the fraud of counterfeit SIM cards spread across Europe. And finally, it's due to jokes circulating on the internet, suggesting that the notorious difficulty of connecting to the network with their devices can only be solved by the famous climb of Gabriela, a character from Jorge Amado's novel, going up onto the roof to get a signal.
This turbulent period was, of course, negatively reflected in the company's stock performance on the São Paulo Stock Exchange. Shortly before the market closed, TIM Participações' shares fell by no less than 7,93%. The reason is simple: Minister Bernardo made it clear that if the company does not improve the quality of its network, it may be prohibited from acquiring new customers. The company holds approximately 25% of the Brazilian mobile telephony market.
Below is a news article from the Infomoney portal regarding TIM's plummeting stock on the stock exchange:
SÃO PAULO - Shares of TIM Participações (TIMP3) fell sharply on Thursday (12) after communications minister Paulo Bernardo threatened to suspend the sale of new plans by the operator, as published by the newspaper O Estado de S. Paulo on Wednesday night. According to the report, the minister warned that in six to seven states TIM's services are far below ideal.
At 11:55 AM (Brasilia time), TIM shares plummeted 7,65%, to R$ 9,78, the lowest price of the day and the worst performance on the Ibovespa. Meanwhile, the main stock market index fell 1,66%.
The news is clearly negative for the company's shares, says Felipe Rocha, an analyst at Omar Camargo. The impact is further amplified by the generally poor performance of the stock markets.
However, he warns that it is difficult to predict the impact of this possible suspension, since it depends on which state it would occur in and which plan or plans would be suspended. Nevertheless, he says that the outcome of this situation is unpredictable. "Whether this suspension will actually happen or if it's just a warning for the company to take some action is difficult to predict," he concludes.
The company states that the quality of service is a topic of constant discussion with Anatel (National Telecommunications Agency) and that it is always worked on with the company's technical team. "TIM also emphasizes that it is available to the regulatory body to address any deficiencies that may be present in a mobile operator's network," the company clarifies in a statement sent to InfoMoney.